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TRADE: Activists Take Issue with WTO Decision on Cheap Drugs

Gustavo Capdevila

GENEVA, Dec 7 2005 (IPS) - A decision by the World Trade Organisation (WTO) to make a provisional 2003 agreement allowing poor countries to import affordable generic drugs permanent has drawn criticism from activists.

The chair of the WTO General Council, Kenyan ambassador Amina Mohamed, celebrated Tuesday’s decision, stressing that the African nations “really drove this process.”

She said the accord to turn the temporary 2003 measure allowing poor countries to waive patents to import cheaper generic versions of drugs in the case of public health emergencies like the AIDS epidemic into a permanent right under the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement would help attract investment in Africa, to kickstart a basic manufacturing process in the pharmaceutical industry.

But, she added, the main benefit is “to ensure that (the African nations) have access to affordable medicines and that they are able to drive the price of these pharmaceuticals to an even lower level.”

The WTO decision is another consequence of the pressure in the 1990s from countries in the developing world, especially Africa, demanding urgently needed affordable drugs against diseases like AIDS, malaria and tuberculosis.

On the other side of the controversy are the industrialised nations, which ardently defend the protection of patents that the pharmaceutical giants enjoy under TRIPS.

The measure taken by the WTO enshrines the right of a developing country to grant laboratories in another nation a compulsory licence to produce a specific drug, which it then imports.

Under TRIPS, compulsory licences enabling companies other than the patent holder to copy patented or copyrighted products without fear of prosecution can be issued by governments under emergency situations, such as epidemics.

A declaration approved at the November 2001 fourth WTO ministerial conference in Doha, the capital of Qatar, clearly establishes that TRIPS must be interpreted in such a way as to allow member states to determine what constitutes a national health emergency, and to take decisions to protect public health.

However, the declaration on public health did not specify how countries lacking the capacity to manufacture generic drugs could gain access to them.

To fill that gap, the WTO members agreed in August 2003 on the provisional mechanism authorising developing countries to import generic medicines from other countries in the developing world.

In response to pressure from industrialised countries, the approval of the temporary measure was accompanied by a statement by the WTO General Council (the global body’s executive branch) in which WTO members confirmed their intention not to abuse the system for commercial purposes.

But the August 2003 decision was criticised by public health groups as restrictive, overly complex and protectionist.

Ellen ‘t Hoen, the coordinator of the Globalisation Project of the Access to Essential Medicines Campaign of Médecins Sans Frontières (MSF), described it as “overly cumbersome and inefficient.”

Consumers International (CI) said the system allowed rich countries to export to the poor, while prohibiting poor countries from exporting the generic medicines they produced.

And in response to the agreement to make it a permanent mechanism, James Love, the head of CI’s Consumer Project on Technology, said “It is an awful decision. It is anti-consumer, anti-competition, and anti-free trade.”

“The developing countries’ negotiators were bullied and pressured by the big pharmaceutical companies and the EU to accept this deal,” he maintained.

Meanwhile, ‘t Hoen said that “to date there is no experience using the mechanism, not one patient has benefited from its use, despite the fact that newer medicines, such as second-line AIDS drugs, are priced out of reach of poor patients.”

The campaign carried out in favour of affordable medicines by developing countries and civil society groups in the 1990s drove down the prices of the antiretroviral drugs used to treat patients living with HIV, the AIDS virus. In some cases the annual cost of treatment plunged from 10,000 to 175 dollars.

Mohamed said the August 2003 mechanism led to a drop in prices in countries like her own, which was “heavily affected by the AIDS pandemic.” In some cases, she noted, prices have fallen 70 or 80 percent.

Nevertheless, ‘t Hoen said MSF is already facing “steep price increases in our projects today.”

“We pay five to 30 times more for second-line AIDS medicines to treat patients who need newer drugs” due to the emergence of resistant strains of the disease, she complained.

“MSF fears it will be extremely difficult to ensure that prices of newer medicines will fall the way first generation AIDS medicines did,” she added.

Tuesday’s decision by the WTO General Council is pending ratification at the Dec. 13-18 sixth WTO ministerial conference in Hong Kong.